2000 ballot measure is key in school-funding lawsuit

Don Peters said a 2000 ballot measure permanently hiked the state sales tax by six-tenths of a cent. One of the provisions, he said, required lawmakers to increase state aid to schools each year to match inflation - even if they have to boost other taxes to do that - unless voters can be persuaded to rescind their mandate.

But Peter Gentala, representing House and Senate Republican leadership, said a strict reading of the state law permits lawmakers to increase either basic state aid or a smaller formula that governs only how much schools get for transportation costs.

The difference is significant: Peters said a full-inflation adjustment would have meant $60 million in additional cash for schools this year; the alternative formula legislators used generated just $5 million.

Key to the fight is the ballot measure that directed the Legislature to "increase the base level or other components of the revenue control limit" for state aid to schools by either the amount of inflation or 2 percent.

Until last year, lawmakers made a full-inflation adjustment. But last year GOP leaders, looking for places to cut funding, concluded the "or" in the language gave them the option to fund just the transportation inflation.

Peters conceded Wednesday to Maricopa County Superior Court Judge Kenneth Mangum that the ballot measure was "not a model of clarity." But he said the context of the words, coupled with other language in the plan, shows that voters clearly wanted to keep schools from falling behind because of inflation.

He argued Gentala had no explanation how it could make sense that voters told the Legislature to "choose a mouse or an elephant, or both."

Compounding the argument is the fact the state constitution forbids lawmakers from tinkering with or ignoring anything approved by voters. Peters said the mandate to fund inflation is protected by that.

Gentala, however, argued even the constitutional protection for ballot measures does not permit voters to tell lawmakers, facing changing conditions, what to do.

Peters rejected arguments advanced by legislative leaders for refusing to provide the full $60 million: that the state is broke and everyone has to share in the cuts. He said the Arizona Constitution provides a clear answer to that, requiring the Legislature to "make such appropriations, to be met by taxation, as shall insure the proper maintenance of all state educational institutions."

If lawmakers believe there isn't the money to fund the 2000 mandate, or that circumstances have changed, Peters said, there is another option: Take the question back to voters and get them to repeal the inflation funding mandate.

The state Attorney General's Office is siding with the schools, not legislative leaders, concluding the 2000 law does require funding of the full-inflation formula. But Assistant Attorney General Kevin Ray told Mangum that is irrelevant.

He said lawsuits like this are possible only to stop the illegal payment of public funds. Here, he told Mangum, there is no argument all the other money appropriated by the Legislature last year - when it refused to fund the full-inflation formula - is being spent illegally.

And that, Ray told Mangum, leaves him legally powerless to order lawmakers to come up with the extra cash.

Peters agreed that there are some questions about the power of the judicial branch to force the legislative branch to appropriate funds. But he said there is a long history of Arizona courts declaring legislative acts illegal, and of lawmakers working to fix them to comply.